NVIDIA: Color on Qtr (164.74)
- Mizuho Securities raises tgt to $180 from $170. Firm notes NVDA reported a strong JulQ GAAP rev/EPS of $2.23B/$0.92 well above consensus of $1.96/$0.70. Data Center revenues were up 2% q/q (176% y/y) despite consensus for down 2%, while automotive continues to grow, up 1% q/q and 19% y/y. NVDA was off in after hours with the modest q/q DC growth, but firm believes NVDA will continue to drive a paradigm shift in the data center with the trend towards massively parallel computing as Enterprise and Hyperscale move to faster and smarter platforms. Strength in the quarter was driven by strong GPU demand, up 21% q/q with strong cryptocurrency mining demand (additional ~$150M topline) and gaming up 16% q/q. NVDA noted JulyQ was a transition quarter for datacenter with the introduction of the new Volta with 10x performance over its prior Tesla/Pascal and was launched commercially only in late July.
- RBC Capital notes NVDA reported solid results across the board with gaming upside, sequential growth in Data Center (+176% y/y despite a product transition) and a modest uplift from crypto-currency. Overall, firm thinks expectations were simply too high into the print and the secular story remains unchanged. After the company reported another solid quarter driven by GPU upside (+59% y/y), firm is taking upside case EPS to $6.00+ for CY18 (up 50c) from $5.50+ stated in prior reports. The Data center segment continues to show robust growth, where firm remains bullish on the shift to parallel processing and Nvidia's ability to continue to raise DGX prices. Increasing estimate for crypto-currency related revenue for both AMD and NVDA to $250M (from $175M) and $150M (from $75M).
- Needham Research believes NVIDA is the future computing platform company, servicing broad markets via its unified CUDA ecosystem and experiencing growth across all business segments. Firm remains confident in its gaming division growth (eSports, gaming laptops, gaming in the cloud) and see particular strength in its automotive roadmap (both AI cockpit and future ADAS/AV) as well as new applications within the data center division as Volta now targets the inference market. Even with the removal of this quarter's crypto currency tailwind, firm believes that in future quarters NVDA can generate $4.50 of earnings power in FY19.
- Stifel Research notes Nvidia turned in a solid beat and raise quarter. Some investors may be disappointed that much of the revenue beat came from the highly volatile cryptocurrency market and not from hyperscale data centers' adoption of GPUs. In firm's view, revenue related to hyperscale data center is notoriously lumpy and investors should not expect steady sequential growth in this business. In the longer term, Stifel does expect GPU adoption in hyperscale data centers and ~15%-20% y/y growth. NVDA share valuation of ~40x forward non-GAAP earnings keeps firm on the sidelines.
- Nomura lowered tgt to $90 from $110 on concerns of gaming environment.
- Citigroup said it was buyers on the after market decline.
- BofA/Merrill believes sell off could be enhanced buying opportunityfor 80% of large cap active managers that do not own the stock.
- Jefferies would be buyers on the decline.
- Bernstein raised is tgt to $180 from $165.
- J.P. Morgan raised tgt to $145 from $122.